Greater Toronto Area home sales decline in August

Home sales in Canada's Greater Toronto Area fell in August for the first time in six months as concerns over trade and the possibility of higher borrowing costs prompted some buyers to hold off, data from the Toronto Regional Real Estate Board showed on Thursday. Seasonally adjusted home sales declined 1.3% in August from July to 5,484 units, ending a run of monthly gains that had continued since March. The board's seasonally adjusted home price index edged down 0.1% month-on-month to C$931,200 ($672,784).

Trade concerns and borrowing costs weigh on buyers

“The main hold-back for many households has been concerns around trade with the United States and the potential for higher inflation and borrowing costs in the future,” Jason Mercer, the board's chief information officer, said in a statement, as cited by Reuters. The Bank of Canada on Wednesday kept its key policy rate unchanged at 2.25%. However, Governor Tiff Macklem said policymakers were prepared to raise borrowing costs multiple times if inflation remained too high. The housing data also comes after the United States imposed new 50% tariffs last month on $20 billion worth of Canadian imports following the collapse of talks between the two countries.

Sales and prices decline from a year earlier

On a year-on-year basis, home sales in the Greater Toronto Area fell 2.1% in August, while new listings declined 14.1%. The board's home price index was also down 4.5% from a year earlier. The Greater Toronto Area includes Canada's most populous city, Toronto, along with four surrounding regional municipalities.